The year 2012 marked a coming of age for tiny landlocked Laos. In July Hillary Clinton became the first U.S. secretary of state since the 1950s to visit the country. The World Trade Organization formally voted in October to allow Laos into the trade grouping after years of negotiations. In early November, Laos’s capital Vientiane hosted the Asia-Europe Meeting, which was attended by dozens of world leaders and senior officials, including the prime minister of China and the president of the European Council. Laos’ estimated economic growth of 8.3% last year likely made it Southeast Asia’s top economic performer.

But all this good news is dissipating like mist on the Mekong because of the country’s suspicious response to the disappearance of an internationally recognized development leader. On Dec. 15, Sombath Somphone was driving on the outskirts of Vientiane when he was stopped in his Jeep by police and then transferred by non-uniformed men into another vehicle, as photo and video evidence from that day shows. No one has seen him since.

The Laos government has said it has no idea what happened to Mr. Sombath. Its official news agency speculated that his disappearance may have been prompted by a business or personal dispute. But diplomatic sources in Vientiane who have seen the footage of Mr. Sombath’s roadside confrontation are convinced that he was taken and is being held by Laos’s security apparatus.

For a country that relies on foreign assistance for roughly 70% of its budget, the agronomist’s disappearance—and the government’s subsequent unwillingness to forthrightly address it—has become a major headache. Few in Laos have built bridges between the foreign and local development communities as effectively as Sombath Somphone.

The oldest of eight siblings, he grew up in a poor rice farming family in southern Laos at the height of the Vietnam War. In the early 1970s, he received a scholarship to study education and agriculture at the University of Hawaii.

I first met Mr. Sombath after he graduated in the late 1970s. I had worked in Laos with a small development agency from 1975, when communist forces seized control of the government, until early 1978. Mr. Sombath wanted to know whether he should return home to use his skills to aid the country’s subsistence farmers. Many of his friends warned him not to go back, arguing that the new communist leaders would not tolerate a U.S.-educated agronomist working directly with Lao farmers.

Because of his gentle and soft-spoken personality, and his non-political view of recent developments in Laos, I and others encouraged Mr. Sombath to help his country increase rice production. Mr. Sombath returned to Laos in 1979.

In 1996, he received authorization from Laos’ education ministry to establish a center that provides community-based development training to young people and local officials. In recognition of his work, Mr. Sombath in 2005 was awarded the Ramon Magsaysay Award for Community Leadership, one of Asia’s most prestigious awards for community service.

It is unclear why the country’s security apparatus would have abducted Mr. Sombath. Some observers speculate that it was due to his high profile at the Asia-Europe People’s Forum, held this fall. Mr. Sombath helped organize the event with the Foreign Ministry on the sidelines of the larger Asia-Europe Meeting, which was by far the largest international event ever hosted by Laos.

At a time when the world’s eyes were on the country, some of the speakers at the people’s forum raised concerns about environmental degradation and illicit land acquisition—two common problems stemming from no-holds-barred economic development in Laos and neighboring countries.

Some believe that Lao security officials detained Mr. Sombath to send a warning to others in the development community not to challenge the government and its economic agenda. Eight days before Mr. Sombath’s abduction, the Lao government expelled the head of the Swiss NGO Helvetas for allegedly criticizing the government.

Laos appears caught in a dilemma that also troubled some of its other authoritarian neighbors like Vietnam and China. On one hand, the country wants to benefit from the rapid economic development sweeping Southeast Asia. On the other, government officials who took power at the height of the Cold War are wary about calls for increased political and economic openness.

Laos has recently sought to project a warmer, more business-friendly image in order to attract tourists and woo foreign investors beyond Chinese and Vietnamese mining and logging companies. The government should not undercut the country’s potential by mishandling Mr. Sombath’s case. Foreign governments should press the authorities to immediately investigate and be more forthcoming about the agronomist’s whereabouts.

After reaching milestone after milestone in 2012, Laos is now at a crossroads. Unless Sombath Somphone is released soon, the Lao government should expect that his disappearance will damage the image of progress it has worked so hard to promote among donor agencies, foreign companies and tourists.

Mr. Hiebert is deputy director of the Chair for Southeast Asian Studies at the Center for Strategic and International Studies in Washington, DC.